The United States of America`s withdrawal from a 30-year trade agreement with Japan has had a considerable impact on both countries` economies. The United States of America, being one of the world`s largest economies, has always had a significant influence on the global economic landscape. The termination of the agreement resulted in significant changes in the trading patterns and economic relations between the two countries.
The trade agreement between the United States of America and Japan, known as the General Agreement on Tariffs and Trade (GATT), was signed in 1947 and was designed to promote free trade and eliminate trade barriers between the two countries. The agreement contributed significantly to the growth of the economies of both countries over the past three decades.
However, in 2019, President Donald Trump declared that the United States of America would withdraw from the Trans-Pacific Partnership (TPP), a major trade agreement involving Japan, Australia, and eight other Pacific Rim countries. The decision to withdraw from the agreement was mainly due to the United States` growing trade deficit with Japan and the perceived lack of benefits for the American economy.
The withdrawal from the trade agreement has had several consequences for the United States of America and Japan. The termination of the agreement has led to the imposition of trade tariffs on several goods, affecting businesses and consumers in both countries. The United States of America has imposed tariffs on Japanese steel and aluminum, while Japan has retaliated by placing tariffs on American products.
Furthermore, the termination of the agreement has resulted in decreased market access for American businesses in Japan. With the termination of the trade agreement, Japanese businesses have been able to take advantage of new tariff-free trade agreements with other Pacific Rim countries, making it harder for American businesses to compete in the Japanese market.
On the other hand, the termination of the agreement has helped Japan to prioritize its trade relations with other countries, leading to the creation of new trade agreements with other countries such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes several Pacific Rim countries.
In conclusion, the United States of America`s withdrawal from a 30-year trade agreement with Japan has had a considerable impact on both countries` economies. While the termination of the agreement has affected American businesses` market access in Japan, it has also allowed Japan to prioritize its trade relations with other countries and create new trade agreements. The long-term effects of the withdrawal will depend on the ability of both countries to establish new trade relations and navigate the changing global economic landscape in a manner that benefits their respective economies.